Start focusing on cost of living, ministers to tell competition watchdog

Britain’s competition regulator is to be told to focus on boosting growth and easing the cost of living, amid concerns the watchdog may have been blocking deals that would help the economy.

Kemi Badenoch, Business Secretary, is preparing a “strategic steer” that will formally ask the Competition and Markets Authority (CMA) to promote “supply-side growth and investment” while protecting competition and ensuring lower prices for consumers.

Her department said: “Too often growth has not been given the priority by regulators that it needs and we are determined to change that.”

The intervention comes after Jeremy Hunt, Chancellor, appeared to voice private frustrations with the CMA last month when asked about its decision to block Microsoft’s $69 billion (£55bn) takeover of Activision, the video games giant behind Call of Duty.

He said: “One of the reasons that companies like Microsoft and Google want to invest in the UK is because we have independent regulators that aren’t controlled by politicians,” Mr Hunt told a business conference.

“I would not want to undermine that at all, but I do think it’s important all our regulators understand their wider responsibilities for economic growth.”

The CMA has also been criticised by ministers over its responsiveness to complaints and its internal focus on diversity schemes.

The Telegraph recently disclosed that the body had published internal guidelines encouraging staff to use 10 per cent of their working time taking part in groups and activities that promote “an inclusive culture and working environment in which everyone can thrive and bring their whole selves to work”.

It is currently operating a “hybrid working model” under which staff are encouraged to spend up to 60 per cent of their time working from home.

One government source warned that strategic steers are not binding and may simply be ignored by the CMA. “They don’t need to take any notice,” the source said.

But a draft version of the document being drawn up stated that “the Government’s overarching expectation is that the CMA should focus on achieving outcomes that help individual consumers and businesses to meet cost-of-living challenges, while also boosting sustainable growth and productivity, and maintaining and enhancing the UK’s position as a leading global destination for investment”.

‘Smarter’ approach to regulation

The document is described as setting out “how the CMA should approach its work”, adding: “The CMA should have regard to this steer when it sets its strategy and when it makes decisions on where to focus and prioritise its finite resources.”

The move comes as part of an attempt to take a “smarter” approach to regulation in order to grow the economy. In a paper setting out the approach, Mrs Badenoch’s department said that Brexit was a “historic moment for this country, giving us for the first time in many decades the final say over the way we regulate”.

It added: “We do not consider regulation to be a dirty word, but it must be used only where necessary and be implemented in a way that provides the right foundations for our economy to thrive.”

The business department warned: “Each of us as consumers lose out when such regulation blocks innovation and competition, increases prices or lowers the quality and choice of goods and services available.”